Microsoft Corp posted an outstanding Q2, powered by its booming cloud and AI businesses. Revenue reached $76.4 billion, up 18% (YoY), with earnings per share of $3.65, both well ahead of analyst forecasts. Operating income climbed 23% to $34.3 billion, while capital expenditures reached a record $24.2 billion. Margins continued to expand, showing strong operational efficiency.
AI & Cloud lead revenue growth
Azure revenue jumped 39%, comfortably surpassing expectations of around 34%. For the first time, Microsoft disclosed that Azure generated more than $75 billion in revenue over the past year, highlighting its crucial role in the company’s growth. The Azure platform is scaling rapidly, driving profitability and positioning Microsoft at the forefront of the AI revolution.
Microsoft’s cloud segment also remains its main growth engine, with total cloud revenue hitting $46.7 billion, up 27% year-over-year. Growth was also strong across productivity tools, LinkedIn, Dynamics, Windows, Xbox, and advertising.
Commenting on Microsoft’s stellar Q2 Josh Gilbert, Market Analyst at eToro, said, “The latest results demonstrate its dominance in cloud and AI sectors. The accelerated Azure growth and disciplined capital spending showcase a company perfectly positioned to lead the next wave of technology innovation.”
$30 billion capex push
Microsoft plans to invest $30 billion in capital expenditures next quarter, further accelerating its AI and data center expansion. CFO Amy Hood also reaffirmed expectations for double-digit growth in both revenue and operating income in fiscal 2026, according to a Reuters report.
According to Gilbert, the key investor takeaway from these earnings results is that Microsoft is spending big to stay ahead in AI but is also growing profit faster than revenue — a true sign of a quality business.